Oil prices rose to fresh four-year highs near $81 a barrel after global producers decided against further output increases despite demands from US President Donald Trump for renewed action to cool prices. Saudi Arabia, Russia and their allies inside and outside the Opec cartel met in Algeria on Sunday to discuss output policy as US sanctions on Iran’s energy sector due to come into effect in November are already beginning to hit the country’s oil exports.
The countries declined to announce additional increases to production beyond what had been agreed in June. Brent crude increased $2.02 to $80.82 a barrel by mid-morning in London — the highest since late 2014 when oil prices were falling as increased production outpaced demand and sent the energy sector into a tailspin. “This is the oil market’s response to the ‘OPEC+’ group’s refusal to step up its oil production,” said Carsten Fritsch at Commerzbank. Buyers are cutting their purchases of Iranian barrels for fear of financial penalties from the US.
This has sent crude higher and spurred Mr Trump to push Saudi Arabia and its Opec allies to raise production to keep prices in check. “The OPEC monopoly must get prices down!” Mr Trump wrote on Twitter on Thursday. US officials are worried about the impact global oil market dynamics may have on domestic fuel prices ahead of midterm elections in November. In late 2016, global producers agreed to curb their production by 1.8m barrels a day to bring an oversupplied market back into balance. But countries cut their output by far greater levels amid unexpected falls in Venezuelan output and disruptions elsewhere.